I have an LLC with four members which started in 2009. Three members are from Vermont and one is from Massachusetts. We have had start up expenses, but no income in 2009. I have several questions:
1. Are we required to file Federal income taxes, given no income in 2009?
2. If we don't file taxes until the business generates income (hopefully in 2010 or 2011), can we later deduct our 2009 expenses?
3. Is it correct to assume that if we do not file Federal taxes in 2009, then we are also not required to file State income taxes (for both Vermont and Massachusetts members)?
I had this same issue in VA. I called the state and explained the situation and they put my information on 'hold' and sent me a confirmation letter (make sure you document date, time, and who you spoke to), I have had the LLC name and startup costs sinve 2008 but I am just now getting ready to 'do' business and hire, so I will call them back and tell them. You can still deduct expenses from your taxes however. Hope this helps!
Also check you state tax obligations!... When the populatity of LLC took off many States saw a new revenue stream to be implemented... Many States require tax to be paid on Sales and not income...
BizResearcher | Window Shopper |
2/17/2010 - 11:29 am
Are you saying you had no sales at all, or that you had more expenses than income, resulting in a loss rather than a profit? If you had any sales, then you need to file a tax return, reporting both income and expenses. It is common for a business to report a loss the first couple of years.
If there are 4 members you should file a 1065 unless you made an election to be taxed as a corporation or s-corporation. If you have losses from 09 that are greater than current income you should carry the loss back two years and recoup your losses from taxes already paid in the post and carry any leftover losses forward.until extinguished.
If you don't file you are making an interest free loan to the IRS.
How would you handle any expenses incurred before the LLC was formed, if you were operating as a partnership? Would these go as basis in a parnership, or LLC expenses?
lividsquirrel wrote:
How would you handle any expenses incurred before the LLC was formed, if you were operating as a partnership? Would these go as basis in a parnership, or LLC expenses?
To answer the above post; those expensives would towards the LLC or the Partnership. You can claim them either way; (a) the Parternship spent X amount of money to form the LLC or (b) the expensives to start-up the LLC were X
Hey Noodle,
Always file your taxes every year regardless of the income earned. If your set up your LLC as a flow through entity, all the write offs you have acquired during your start-up will flow through to your personal taxes. If you don't have enough income for your write offs, any extra will carry forward to the next year.
Hope this helps!
Used2BeYankee | Window Shopper | 4/7/2010 - 1:20 pm
krummelhart | Creator | 2/17/2010 - 7:20 am
BizResearcher | Window Shopper | 2/17/2010 - 11:29 am
jbeidle | Contributor | 2/24/2010 - 7:01 pm
noodle | Window Shopper | 3/3/2010 - 12:38 pm
coolamy86 | Window Shopper | 2/25/2010 - 12:13 pm
lividsquirrel | Window Shopper | 2/27/2010 - 2:56 pm
Fireplace-Guy | Creator | 2/27/2010 - 9:43 pm
teamextension | Contributor | 2/16/2010 - 3:44 pm
Judi-and-Mark | Rising Star | 3/17/2010 - 1:23 pm
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